The week. Lets check in on the markets. The nasdaq closed at a record high yesterday. Only a tiny bit. Correct, but still. Lagged the dow for once. The resilience of this market is remarkable. S p futures down almost 5. Nasdaq futures down 17. The stock of the morning and weight on the market is apple. Shares slipping after iphone sales declined in the most recent quarter, falling short of wall street expectations. The Company Giving weaker Current Quarter revenue guidance. Lots more on results in just a moment. Did you see china growth as well that slipped. Asian equities, japan, south korea and hong kong closed for public holidays. Golden week holiday, right . Extended golden week. There we go. Either way, what is open, you can see down is australia. The ftse Straits Times in indonesia is up three quarters of a percent. A look at european trade which is negative today. Weve been up quite nicely over the last ten days. We also had eurozone march Producer Price inflation down about 0. 3 on the month it was seen at zero percent. It is soft on that data, but comes following nice pmi data yesterday, which was strong across the board. Also eurozone q1 gdp up 5 quarter on quarter. The markets have been soft since the open today. There was some buying of treasuries yesterday. Notably on the weak auto sales which trickled out. The tenyear yield sitting below 2. 30. Well see how it reacts to the fed statement. Well see if the fed keeps its hawkish tone of raising rates two more times this year. As for oil prices, theyve been pretty soft. Yesterday falling below 48 a barrel on wti. Back up this morning with a 1 gain. Will this browounce hold . Brent below 50 yesterday. Nat gas is flat. The only thing to remember which is highlighted by the earnings of the likes of bp, exxon, even though they have slipped, year on year there are relative improvements. A lot of Multinational Companies are showing improvements on earnings thanks to the dollar cooling off and not breaking out following treasury yields. A bit firmer this morning, 0. 2 against the euro and the yen. 112. 20 is the price. Stronger against the pound this morning. As for gold prices, they have been soft. The fear index, the vix at a tenyear low. Gold that cooled off. Less demand for safe havens. Gold prices down to 1,254 an ounce. Apple and the unexpected dip in iphone sales. Shipments of the product dropping 1 from a year earlier. They were under pressure from Share Holders to hand over more of its cash. It raised its dividend by nearly 11 to 63 cents a share. Joining us to discuss results is dan morgan from cenovus trust company. Thank you very much for joining us. We saw a negative reaction to the share price after hours yesterday. Everybody is focused on the i phone sales drop. How big a concern is that givens a tim cook said on the Earnings Call that it is in anticipation of the iphone 8 later this year . I think we have to give apple a bye on this quarter. We have iphone 8 coming out. The anniversary phone. Also average selling prices were decent. Up about 3 , about 655 per phone. I think at this point it was not a great quarter. They did not do what everybody anticipated. But a lot of good things to come down the road. Just reading the conference call, tim cook as usual goes back to india as a growth opportunity, but some are worried about the china numbers, which slipped double digits. How much of a weight will that be on the stock and the concern Going Forward . China was down 14 which is discouraging, especially in the fact a couple years ago if we were talking about apple we would be talking about all the great things in china. Now you bring up india. The biggest thing for china, those are the lower priced phones. In terms of average selling prices and margins. Does apple gear towards these emerging markets in terms of trying to expand volumes over there . Do they focus on the higher average selling prices, higher margin phones, can the iphone 8, iphone 7 plus, anniversary phone is a thousand dollars. Which direction do they go with this. You are an owner of stock in apple. How much does the payout ratio, the cash return to shareholders play into your decision for that . Or is it all focused on core earnings . Weve owned iphone apple since 2005. So we have a single digit cost base on the stock. The dividend is great to get, but we own apple because were looking for the share price to go up, like an mazon and google. I think its great theyre giving us money back, but it wont have a major determination Going Forward. Tim cook said were seeing a pause in purchases on iphone which we believe are due to the earlier and much more frequent reports about future ix phoniph. Was that cook himself building expectation for the decade iphone . Seems like a lot of pressure on this one, especially with investors giving apple the benefit of the doubt, it was only selling off after hours 1 . It didnt sell off as much as i would expect. You are building pressure Going Forward. If iphone 8 comes out and the anniversary phone comes out and theyre not as strong in terms of adding additional unit volume to apple, people will start to scratch their head and say this looks like a mature business. You have come out with two new phones t has not driven up unit volume as much as we would expect. Everyone is giving them a bye, if they dont deliver on iphone 8, people will start scratching their head again. No doubt, that is the focus with shares down about 1. 5 . Dan, thank you for joining us. Thanks, sarah. Dan morgan. All the analysts are bullish on apple. Most of them are. Reiterating the bullish calls, not worried about some weakness seen. 2 fall in the stock price after hours, but its been on a tear recently. Israelied coming into ea ee eed into the past year. A quick round up of other big earnings movers for you. Pnb paribas reporting better than expected earnings. Results driven by fixed income and equity trading units. Novo nordisk posting a profit beat and is raising full year guidance. Results from sales of new diabetes and obesity drugs. Hugo boss shares are under pressure despite better than expected earnings and revenues. The company is calling this a transitional year. Twilio shares plunging. They are lowering fullyear revenue. They blame uber in part saying the Ridesharing Company will reduce Communication Services over the past year. Weight watchers beating the street. The Weight Loss Company adding subscribers for the fifth quarter in a row. And mondelez expecting higher profit and sales. Its up 2. 6 . This is one i follow. Its a good one for us to talk about. Its a company that 80 of the business is overseas. I talked to irene about the results last night. Interesting comments on the macro environment. She said q1 was very messy because of the easter shift. She did say shes seeing a turnaround in russia, germany, Southeast Asia and mexico all better. What surprised her most was the fast recovery from the india demonetization. Also interesting, she said in europe the business has been good. Thats their biggest market but some concerns around brexit and around the French Election are leading to what she called muted consumer confidence. Once she says we see clarity on those issues, she expects a bounce back in business. As for the u. S. , shes waiting to see a rebound before pinning it to a certain factor like delayed tax refunds. Its an interesting story. Packaged food in general has been struggling with growth. This one is heavily reliant on the macro nick environmeeconomi. Gmofree triscuts. The strength of the dollar important to them as well. Absolutely. The fact that has cooled off has been helpful. To the day ahead on wall street, the fed wraps up a twoday policy meeting with a decision due at 2 00 p. M. Also we have the adp employment report at 8 15 eastern, followed by services pmi and ism manufacturing. Before the bell, time warner and yum brands. After the close, facebook, tesla, aig and fitbit will report. Both facebook and tesla have been high fliers and have run up into the results. Will they do an apple and slightly disappoint. Or an alphabet and am mason. Uber and google will face off in court today. Theyre going head to head after waymo sued uber to stop its selfdriving car. They accused uber of stealing trade secrets and infringing on its patents. Well see what comes from that. We call them patents here in this country. I think most people in the uk would call it patents. Deutsche bank has a new shareholder. The chinese conglomerate hna has taken over blackrock as the largest stakeholder. Deutsche bank has been on a mission to increase funds after incurring losses related to misconduct charges and legal investigations. Not a lot of reaction. Is that a big deal . Top shareholder change . I think its interesting in the perspective of what was and still just about it is the top three sgloebglobal investment b having a 10 stake from a chinese company. Particularly given deutsche banks falling share price, many wonder if this will push for a bigger takeover. Perrigo says its offices were searched by the u. S. Department of justice antidrug division. Shares down 1. 9 . Marine le pen offering a clear vision of the currentry ahe currency ahead of the election on sunday. I think theres a debate tonight . Im trying to figure out where to watch it theres some french bars where i have seen soccer matches in the past. Soccer is easier to watch in french than the debate. Lets look at where european stocks are trading. Soft open, and weakness across the board. Nothing crazy. But transis dofrance is down th. Excuse me, are you aware of whats happening right now . Were facing 20 billion security events every day. Ddos campaigns, ransomware, malware attacks. Actually, we just handled all the priority threats. You did that . We did tha really. We analyzed millions of articles and reports. We can identify threats 50 faster. You can do that . We can do that. Then do that. Can we do that . We can do that. Good morning. Welcome back to Worldwide Exchange. Lets look at the futures. Negative across the screen. Albeit not in a pronounced fashion. Yesterday, though the nasdaq hit another alltime record close it was the laggard of the three indices. The dow outperformed which is a slight change. Overnight, apple declining about 2 after iphone sales disappointed. Yesterday, oil prices down. Were up a percent today. Above 48. That oil price softness something to keep an eye on. Down over 2 yesterday. Rebounding today. A developing story out of north korea. A news agency there giving details on an american who was detained in the country in late april. The man was said to be intercepted because he attempted to commit hostile criminal acts with an aim to subvert the country. He was invited to pyongyang to teach accounting. The eu chief negotiator says there is no brexit bill, no punishment, first objective in talks is to get british obligation. This after reports that brussels was looking for 100 billion euros for the brexit. Britains brexit minister, david davis saying it is not for eu negotiations to decide how the whole split works. This will be a sticking point, how much theyre charging them to exit. Theres been a lot of clashing over the back of this clearly its an important election factor back in the uk. Theresa may is painting herself as the strongest person to carry the negotiations out. People are questioning why the leaks happened from the eu side during the course of a British Election campaign. The headline for us, the pound is up above 129 and has not flickered off the back of this. In general the pound has strengthened since the general election was called in the uk on the belief that theresa may will increase majority and strechngtn her hand in the negotiations. This doesnt make the process messier, the fact that europe is leaking a bigger payment . This was the analysis of what that is likely to be. Yes, i think the interesting thing is the pound has not moved off the back of this. They know it will be a tough negotiation over two years. Theresa may came out yesterday and said she will be a im not sure i can say that word on air, but she will be a bloody difficult woman. I think thats allowed. Bloody . Its a swear word in the uk. Its been said. Frances president ial rivals emanuel macron and Marine Le Pen will face off in the final televised debate today. Le pen making comments about the europe ro aft euro making it clear she wanted to take france out of the currency. A twoyear time frame. Nobody believes that. Nobody believes she will win. Its 60 40 in the polls towards mckroacron. With the tv debate, its not if she with outperform, but if macron can do enough to turn out supporters. Macrons supporters are broad, but not that committed. The question being will he give an energized performance that makes all those wouldbe macron Voters Decide to vote or abstain . Mr. Macron in the last week said himself his biggest enemy is people deciding not to vote. Keep an eye on it. The market thinks it will win. Sunday. Sunday is the vote. Well get results 2 30. Tv debate at 2 00 today. In french, sadly. At the bar. At the bar. Coming up, a budget bill that would fund the federal government to the fall could be vote the on as early as today a live report from capitol hill next. As we go to break, lets get the Weather Forecast from bill karins. Good morning. A dangerous day once again in the middle of the country. Another huge spring storm. Nice on the east coast, nice on the west coast. No problems for Business Travel here. All the issues are in the middle of the nation. Houston, new orleans, st. Louis could be impacted. We are worried about flash flooding. We had horrible river flooding, now with thunderstorms moving back over, another 2 to 5 inches of rain. That will go out to indianapolis. Later today, severe thunderstorms rolling through louisiana, mississippi. In total, 13 Million People under flash flood watches. Then we have another 19 million at risk of severe storms. Storms will start in east texas, move through louisiana and a chance of a few tornadoes. Thats your Business Travel forecast. More Worldwide Exchange when we come back. Welcome back to Worldwide Exchange. The United StatesSenate Voting yesterday to confirm jay clayton to head the jusecurities and exchange commission. He worked on mergers and acquisitions and Capital Raising efforts. He worked on projects like a alibaamal alamudd alamudd alley b alibabas ipo. The president is also working on the budget. Democrats kept money out of the bill that could fund a border wall. The president upset over the perception in washington that democrats got a better deal in the bill to fund the government until the fall. After years of partisan bickebic e bickering and gridlock, this bill is is a clear win. The president did not play much of a role in the budget negotiations, hopefully that may change. Democrats point to victories in the compromise like funding for planned parenthood and nih, and there is no money in it to build a border wall. The administration fired back. Make noti mistake, we are beginning to build the wall. Reporter as this fight played out publicly, moves behind closed doors to resurrect the American Healthcare act may be close to failing. Coverage for people with preexisting conditions still is a staking point. Preexisting conditions were covered under the march 23rd iteration of this bill. Lets go back to that. Lets vote on it. Reporter support among all Congressional Republicans falling short for now. And former president obama took to twitter to try to protect the current healthcare law saying we need to keep them in place for our children. Back to you. Do we know when well get a vote on that . How close the republicans are . Its expected it could come theyre trying by the end of the week. However at the moment there are 22 republicans now against it. 23 is that critical number if they have 23 against it, it will not pass. So theyre trying to make sure they absolute i will have the votes before this comes. They hope by the end of the week. Well stay tuned. Edward lawrence, thank you. Also coming from washington, a new report, the National Security agency collected more than 151 million phone records last year despite changes to s surveillance laws. The ns ashga defended the repor saying the figure was tiny compared to the scope of u. S. Surveillance preedward snowden. Still to come, the top corporate stories and a round up of the Global Market picture. And apples cash hoard bigger than the market cap of ge . Stay tuned, youre watching Worldwide Exchange. Good morning. Apple front and center as iphone sales disappoint. What tim cook told cnbc that every apple investor needs to hear. A warning for your money. Why Jeffrey Gundlach says this summer will be anything but red hot. The first lady and the former first lady are trending today. Well tell you why. Its wednesday, may 3, 2017. Youre watching Worldwide Exchange on cnbc. Good morning. Welcome back to Worldwide Exchange on cnbc. Im sara eisen. Im wilfred frost. Good morning to you from me as well. Straight to the Global Market action. Slight gains yesterday, a slight reversal in terms of the index leadership. The dow was the best performer. The nasdaq the laggard of the three. Albeit still higher and hitting a record alltime close. Were called lower in the premarket. Just slightly. 32 points or so for the dow. Apple shares are part of the story here. They are pulling back from an alltime high after the Company Reported a surprise drop in iphone sales. Lets get to josh lipton who spoke to tim cook on the results. Good morning. Good morning. So lets start with apples flagship product where units did slip 1 year over year to 50. 8 million. Analysts expected units to rise 2 . Tim cook said demand was stronger than reflected because he reduced inventory by 1. 2 Million Units and that consumers are putting off upgrading because theyre waiting for that new phone. On china, cook telling me at the high end of our line, the new product were doing well. In some previous generation iphones we are not doing as well as a year ago. Why is that . Were working on that. Back to you. Lets pick up on that china thing. The offset is that the rest of asia numbers showing strong growth. The break down of what theyre selling in china, does this suggest a shortterm shelf life for the phones in emerging markets and we have to pair down expectations . I think what cook was saying there, to your point, listen, in china, hes pleased with the performance of the seven, and the seven plus. Not as happy with how the previous generations were doing. He didnt mention competition, but if you talk to analysts, theyll say in that tier that cook is addressing that theyre facing more competition from local drivers. He did point out they are doing a bit better in the Current Quarter, though he stopped short of saying he thinks well return to growth in the nearterm. Some of the bulls this morning, which there are a lot of them in terms of the analysts community, are pointing to the Services Revenue which continues to rise double digits. Whats driving that growth . Where does happenal want to get the number . A big driver there is the app store. You saw strong growth there again. Talking to analysts last night who are bulled up on apple, they were perhaps a bit disappointed when it came to the iphone, they were heartened by services, pointing out even though iphone disappointed, services jumped about 20 to billi 7 billion. Whats interesting is what happens from there. With apple music. They dont think of apple music as just a place for songs. They think of it as something much broader than that. Maybe a push into original programming. Apple is sticking with the forecast that theyll double Services Within four years. Josh, did tim cook make any comments about the dispute with qualcomm . He did. That fight with caqualcomm has gotten ugly quickly. Apple is saying youre charging us excessive royalties, charging us for technologies you have nothing to do with. Qualcomm said you built this iphone franchise on the back of our ip, youre trying to pay less. In my interview with cooks he ma wo cook, he made it obvious hes not backing down and its something the court also have to decide. The stock is down premarket, 1. 5 . Is the upshot here disappointing quarter but just raises the expectations more for this iphone coming out this fall . Investors are willing to write it off . Right. I think this stock was up 25 year to date heading into the print. It was up 60 from the low last may. Largely that is due to expect tas expectation of whats coming in the fall. Skeptics will say American Consumers at least are not upgrading phones as often as they once were. That may be true but theres a big pool of iphone users out there just waiting to upgrade, waiting for that brighter display, stronger camera, better battery. Josh lipton, thank you very much. Great stuff on your conversation with cook. Check out some apple suppliers on the back of that report. Shares of hon Hai Precision are liar. Same for taiwan semiconductor. Shares of dialogue semi are under pressure in todays trade. Another check on Global Markets this morning. Futures are a bit soft coming off gains yesterday. Slight gains yesterday. The dow called lower by 35 points. In asian trade, most markets are closed this morning. The likes of japan and korea and hong kong. We have declines in australia of 1 , gains for indonesia of 0. 8 . European trade soft, down about a quarter percent. We are down about a third of a percent for the French Economy this morning. As for the Broader Market picture, oil prices were a big story yesterday. Softness dragging wti below 4 a barrel. Were back above that level this morning with a nice 1 pop. Brent back above 51, up 1. 3 . As for the treasury note yields, still stuck below the 230 level. Buying of treasuries yesterday on what was weaker auto sales across the board. That was the Economic Data point people were watching. Well get more today. Services coming in. The adp report on private sector jobs, and the fed statement at 2 00 p. M. Eastern. The u. S. Dollar is fifrm rmer b light treasuryyields are following lower. T gold prices have cooled off lately, lower on the back of the stronger u. S. Dollar. Down 0. 2 . Jeff gundlach is out with a market warning after yesterdays close. Gundlach telling clients to get r ready for a summer Interest Rate correction. Nobody sees a change in policy today, but will they suggest the First Quarter data that is soft is temporary. Absolutely. I think its fascinating that stepping back from this, how little focus there is on the fed meeting today relative to corporate earnings which is a change from the havent couple of months and quarters. Just to get you up to speed, the fed policy decision will be out at 2 00 eastern time. Thats the statement no news conference, but live coverage on cnbc. A trio of economic reports today. The adp employment report at 8 15 eastern, followed by services pmi and ism manufacturing. Before the bell, time warner and yum brands and volkswagen. After the close, facebook, tesla, aig and fitbit will report. Result also focus on nasdaq and facebook and tesla. Since there is no yellen at that time well go to the bar and the french debate. Mike santoli gave the french bar to me. Maybe hell come and join us. Good morning, mike. Mcdonalds getting a premarket pop following an upgrade from goldman sachs. Goldman upping the stock to buy from neutral. Mcdonalds up 1 this morning at 14 142. 8. Etsy is down big after announ announcing the ceo will step down. Gileads antiviral treatments failed to meet analyst expectations. And fireeye enjoying a nice pop after the Third Quarter beat. The company producing second year guidance that did top expectations. Hillary clinton opening up about her election loss for the first time at an event in new york. She gave her take on why she lost the 2016 election. Do you take any personal responsibility . Of course. I take absolute personal responsibility. I was the candidate. I was on the way to winning until the combination of jim comeys letter on october 28th and russian wikileaks raised doubts in the minds of people who were inclined to vote for me but got scared off. Those two statements kind of polar opposites. I take responsibility and blaming other factors. Late last night President Trump tweeting fbi comey was the best thing that happened to Hillary Clinton, he gave her a free pass for many bad deeds. The phony trump russia story was an excuse used by the democrats as justification for losing the election. Perhaps trump just ran a great campaign. Maybe they both can get over this and stop talking about it. I agree. I suppose its the first chance she had to speak about it publicly. She was asked the question. But those two different bytes seem to oppose each other. Unusual activity on first lady melania trumps personal quitter account. The verified account which only has two favored tweets, now has a third. It was a smile and then a frown. The tweet has since been removed. I like things by mistake, dont you . I do. Then you are like i hope people dont notice. And you can see other peoples favorites. You can. You cant touch them by mistake. It wasnt a groundbreaking antitrump it wasnt a retweet that would be stronger. Also has happens by mistake sometimes. United airlines paying five figure compensation to the Rabbit Breeder whose giant bunny died on one of its flights. The bunny named simon apparently froze to death last month on a flight from london to chicago. The amount of the payout is unknown. Another payout for the airline. Simon. Thats not a good name for a bunny. Thats a giant bunny. Three foot. Wow. I wouldnt know. How big is a bunny . Bunnies are little. Dont you see them outside . That looks like a deer. That is large. Maybe shes a small woman. Maybe. Either way. Not impressed. Sorry, simon. I hope the payout is big enough. Still to come, obamas big bucks, and one billionaire slams President Trump calling his core promises a con. The must reads coming up. And another check on u. S. Equity futures. Weighed down maybe a bit by apple shares. Dow futures down 33. S p futures down less than 5. Nasdaq futures pulled back from a record, down 17. Worldwide exchange will be right back. Welcome back to Worldwide Exchange. Time for our must reads, stories catching our attention. My pick in the washington post, trumps promise to bring back coal jobs is worse than a con. It is penned by mr. Bloomberg who is promoting his new book. Bloomberg writing pollution from coal fired power plants kills 7500 americans each year. According to the Clean Air Task force. He says the fact is putting coal miners back to work is no more possible from a business standpoint than putting telegraph operators back to work taking morris code or putting kodak employees back to work doing film rolls. 7500 people dying of pollution from coal, saying that not only is it sort of technologically going the wrong way, but actually its dangerous as well for some of these people that want their jobs back. Going after President Trumps political promise to bring this industry and jobs back. Absolutely right. Big debate there. My pick is in the usa today. Barack obama buck raker. This after he will earn 400,000 for a speech. The two peaches coo peaches cpe symbols of a Political Class disconnected from voters who struggle for the American Dream for their children while earning in an entire year what obama earns in 11 minutes. I disagree with that perspective, as long as his public life is over. It was every right that very right that Hillary Clinton was criticized for taking all sorts of money for speeches in between being secretary of state and then running for president when she still intended to return to public life, but for politicians who are done, its perfectly all right. Charles osborne maybe timed it slightly wrong. I agree, this is the market. This is what theyre offering to get paid. And politicians themes are not paid as much as very smart people could earn in the private sector. If you want to track the best people in politics, theres got to be a way to earn the money back later. The crucial thing it has to come after public life is 100 over. That is the case for president obama. That wasnt the case for Hillary Clinton before she ran for president. Were approaching the top of the hour. That means the team is getting ready for squawk box. Joe kernen has a look at whats coming up and a funny face. Its like a monday. Funny is all in the eye of the beholder, isnt it . Im with wilf on that. President obama, its been predicted hell be the first billionaire expresident. That will be hard at 400,000 a piece. But and most president s in the past, the value goes down as their time from office gets further and further away. I think hell do well for a long time. But the clinton model, wilf, thats the model, dude, where, you know, youre sort of an exfirst lady, exdoctpresident t you are secretary of state, you might be president. I agree. Im critical of that. Thats the scam where you can make a couple hundred million dollars. As long as you totally finished from public life, i agree. If i were to do it, thats the superior Business Model to go after. It was very, very lucrative. Did you know its jobs is it jobs my god. With the 0. 7 gdp and a pretty tepid number last time this will be an important number to watch. I left for a couple days. I come back, apparently the democrats passed the budget they wanted. Did you guys it was a compromise. Yeah. Yeah. Compromise. As many pages as the stimulus bill. Probably more i dont know what happened. I leave for two days on a college thing, all hell breaks loose. Apple the government doesnt shut down. The government didnt shut down. It wasnt a good shutdown. Well have one of those maybe in september. Apple, 7 775 billion now, a new high, but called lower on tepid apple sales. Can i ask you iphone sales. Yeah. Can i ask you a question, when your iphone, does the battery start going down faster the older it is . Do you know. I think it does. But the other trend you would have to say is since iphone 1, the quality of the battery is a hell of a lot better. I know. I dont have a new one. Its going down now. Have you updated the software lately. You may have the phone phone they gave me a new phone. I think we need a microphone on becky. The other problem with your phone, you stream Worldwide Exchange live on your way in. That eats up the batteries. Its well worth doing. But it eats up the battery power. Thats true. Is that whats doing it . Yeah. Okay. All right. I wont argue with that. Ill give you that. By the time you get in we have to leave it there. Youre cutting me off. I am, im afraid. I dont have to do this. Its a good tease week for me. I only have three days. You know you love it. We love it ourselves. We look forward to squawk box. Coming up, the countdown to the fed decision. I love you, couch. You give us comfort. And we give you bare feet. Backsweat and gordos everything. I love you, but sometimes you stink. New febreze fabric refresher with odorclear technology. Cleans away odors like never before. Because the things you love the most can stink. And plug in febreze to keep your whole room fresh for up. To 45 days. Breathe happy with new febreze. Welcome back to Worldwide Exchange. U. S. Equity futures pointing to a lower open on wall street. Dow futures down 33. S p futures down less than 5. Nasdaq pulled back from a record down 17 in the early action. Joining us is Savita Subramanian from bank of America Merrill lynch. Its been amazing to watch the nasdaq close at record after record. Are the earnings backing up the valuations . You know, tech has been a surprisingly strong sector. I would say the earnings support is there. Its interesting. Tech is still trading at almost the lowest valuations weve seen in 25 years. Its really every move in price has been matched in lock step by a move in earnings. Its so not expensive. What is interesting is we are seeing other sectors take the reins from tech. I have to say, i was surprised by this strength and robust numbers that were seeing. Were seeing records everywhere. And the sector thats really leading the charge this earnings season is industrials. A lot of bellwether Companies Like caterpillar. Machinery is one of the biggest contributors to earnings. It feels like this tech reign, while it is going strong, may be ced ceding leadership. Savita, your point about tech valuations only stands because the average valuation for the sector is weighed out by old tech drags the valuation average down compared to new tech. Some Companies Like amazon you cant argue are at record lows for earnings growth. Youre right. Amazon is not technically in the tech industry. Its considered a consumer stock. On a case by case basis, it varies. Old tech, like these Big Companies that morphed from Growth Stocks to cash return vehicles are cheaper than ever. That to me says and theyre posting solid results. Apple is one of the most inexpensive stocks. These are inexpensive companies that matched cash flow and earnings with price performance. Granted, youre right, the tech bubble distorts everything. To your point, you know, the usa today money section pulls out the caterpillar image on earnings. Says revived sales abroad helped push up u. S. Profit. The wbig story is the recovery n overseas sales. Whats going on in u. S. Markets in terms of demand, any signs that this will rebound after what was a weak First Quarter for Economic Growth . This is where it gets interesting. In the u. S. , were starting to see really different trends than what weve seen for multiple years. First of all, Management Guidance is is really strong. Management has been fairly conservative because of policy risk, this quarter is tracking some of the best guidance weve seen in multiple years. The other interesting trend that is different and new is multinationals, companies with exposure abroad are seeing better trends than domestics. Something is happening on the surface that suggests global is better. We have to leave it there. Thank you very much for joining us. Thats it for Worldwide Exchange. Squawk box is next. Al campus connected. And why a Pro Football Team chose us to deliver fiberenabled broadband to more than 65,000 fans. And why a leading car brand counts on us to keep their Dealer Network streamlined and nimble. Businesses count on communication, and communication counts on centurylink. The shlike a bald penguin. How do i look . [ laughing ] show me the Billboard Music awards. Show me top artist. Show me the top hot 100 artist. They give awards for being hot and 100 years old . Well take 2 [ laughing ] xfinity x1 gives you exclusive access to the best of the Billboard Music awards just by using your voice. The Billboard Music awards. Sunday, may 21st eight seven central only on abc. Good morning. Apple shares are slipping. The Company Posted weaker than expected iphone sales, and it is worth about 7 770 billion. Tim cooks comments on the quarter straight ahead. Markets now, the futures trading lower, but an early read on april jobs could shake up the trading day. And President Trump tweeting that a Good Government shutdown in september could fix the mess in washington. A live report from d. C. Its wednesday, may 3, 2017. Squawk box begins right now. Live from new york where business never sleeps, this is squawk box. Good morning. Welcome to squawk box on cnbc. We are live from the Nasdaq Market site. Im becky quick along with joe kernen and andrew ross sorkin. Looking at u. S. Equity futures, the dow moved up. Markets higher. Th this morning, the dow down about 32 points. The s p down by 4 1 2. The nasdaq down by 16. Yesterday apple shares were picking up as we headed into the close, before they came out with the earnings. Apple, as a dow component helps across the board with these things. That did boost things as we headed into the close. Well talk more about apple shares and what happened after the bell. Thats an indication of why you see things lower. Overnight in asia, markets in japan,